Suppose, towards a contradiction, that $(r^n)$ is not Cauchy. Then $\exists \epsilon >0$ such that for every $n\in \mathbb{N}$, $\exists m > n$ such that $|r^m - r^n| \geq \epsilon$. Then $|r^n| > |r^n(r^{m-n} - 1)| = |r^m - r^n| \geq \epsilon$.
This is as far as I got assuming only that the sequence is bounded by -1 and 1, which I'm not even sure if I'm allowed to assume.
The question is at the end of a chapter that goes over Cauchy sequences, and how they allow us to define products of reals by showing that for $x,y\in \mathbb{R}$, $\lim_{n\rightarrow \infty} (x_ny_n)$ converges, where $(x_n), (y_n)\subset \mathbb{Q}$ converge to $x,y$ respectively.
Any help would be appreciated.
Edit: Since $|r|< 1$, $|r|= (1 - k)$ for some $0<k<1$, so $r^{n+1} = r^n(1-k) < r^n$, and the sequence is strictly decreasing. Since $(|r^n|)$ is bounded below by 0, the sequence must converge, so the sequence is Cauchy.
You know that every convergent sequence is Cauchy.
You also know that the geometric sequence with $|r|<1$ is convergent.
Therefore the geometric sequence with $|r|<1$ is Cauchy.